2006: Fall PLAN A6603.001: Infrastructure Planning and International Economic Development Wednesday, 11 am-1 pm, Buell 300 Sumila Gulyani Email: [e-mail] TA: Cuz Potter ([e-mail]) Abstract Starting with old and new theories of infrastructure and its links to economic development, this course covers cross-cutting themes in two types of economic infrastructurewater supply and electric power (with some discussion of transportation issues). Drawing on international case studies and with a special focus on developing countries, the course examines: (a) demand from firms and households; (b) supply and delivery structures, and options for financing; and (c) current approaches to addressing infrastructure problems. The course will provide an introduction to infrastructure economics. The emphasis, however, will be on helping students develop a robust analytical framework and an understanding of the political economy of infrastructure policies, provision and service delivery.
Assignments and grading Assignment 1: 55%: Five short papers, 1-3 pages single spaced, as follows: Assignment # 1.1 1.2 1.3 1.4 1.5 Topic Infrastructure and development Water: Supply-side issues Water summary Electricity demand Infrastructure theory Due, 9 am: Sep 12 Oct 16 Oct 30 Nov 11 Nov 20 Pages 1-2 1-2 2-3 1-2 2-3 Percent of Grade 10% 10% 12.5% 10% 12.5%
Assignment 2: 20%. Team assignment: Powerpoint presentation (10-slides max.); electronic submission on Oct. 2 and in-class presentations on Oct. 4. Assignment 3: 20%: Team assignment. Short paper on infrastructure governance and management due on Dec 4, and in class presentation (10-slides max.) on Dec 6. Class participation: 5% There will be no final exam.
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Course outline and schedule Session# 1 2 3 Date Sep 6 Sep 13 Sept 20 Content Introduction Required reading
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Sep 27 Oct 4
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Oct 11 Oct 18
INF (1): Links between infrastructure and Hirschman (1958); World Bank (1994); economic development Gramlich (1994) INF (2): Basic services as a right & intro Almond (1993) to infrastructure politics Movie: Thirst INF (3): Infrastructure as catalyst for local Iskander (2005) economic development INF (4): Infrastructure business: utilities and other service providers. Student presentations on Chicago/San Franciscos water, transport and electricity services INF (5): Intro to theory World Bank (2004); Gulyani (2001a) HH demand: Water sector insights Water supply in developing countries (1): The Economist (2003); Fass (1988) The problem and sector goals Water (2): Buyers, sellers and other stakeholders Water (3): Household demand Crane (1994); Whittington (1991)
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10b 11
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White et al. (1972); Thompson et al. (2000); Gulyani et al. (2005); World Bank (1993) Nov 1 Water (4): Integrating demand-driven Gulyani (2001b); Altaf et al. (1993); Griffin approaches and supply-side reforms et al. (1995) Supply-side restructuring and firm demand: Electricity sector insights Nov 8 Electricity (1): The problem and options for Hunt et al. (1996); India Report (1996); fixing the supply side Economist (2000); Agarwal et al. (2003); Kessides (2004) Nov 9, (Evening) Movie: Enron, 8pm TBC Nov 15 Electricity (2): Firm demand and userGulyani (1999); Lee et al. (1999) devised solutions Infrastructure theory, pricing and governance Nov 22 INF (6): A theory of firm demand for Gulyani (2001a); World Bank (2004); infrastructure and its application to Gulyani (2001c) electricity/water/transport Nov 29 INF (7): Infrastructure pricing: Theory and Bahl and Linn (1992); Lampietti et al practice (2001); Whittington (1992) Dec 6 INF (8): Governance, management and Wade (1997); Tendler (1997); Tendler et al. incentives: Student presentations (1994); Paul (1998); Taru (2002 or 2005).
Oct 25
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Required and optional readings, by session Introduction (Session 1) Sep. 6 Infrastructure and economic development: (Session 2) Sep. 13 Hirschman, A. (1958) The Strategy Of Economic Development. Yale University Press, New Haven. Chapter 5, pp. 83-97. World Bank (1994) World Development Report 1994: Infrastructure For Development. Oxford University Press, New York. Overview and Chapter 1, pp. 1-36. Gramlich, E.M. (1994) Infrastructure investment: A review essay. Journal of Economic Literature, Vol. XXXII, pp. 1176-1196, September. Additional/Optional Reading: Aschauer, David A. (1989) Is public infrastructure productive? Journal of Monetary Economics 23, pp. 177-200. Basic services as a "right" & intro to infrastructure politics: (Session 3) Sep. 20 Almond, B. (1993). Rights. A companion to ethics. P. Singer. Oxford, UK ; Cambridge, Mass., Blackwell Reference: 259-269. Additional/Optional Reading: WORLD HEALTH ORG., THE RIGHT TO WATER 3 (2003), available at http://www.who.int/water_sanitation_health/rtwrev.pdf Sumudu Atapattu, Who Owns Water? Recent Developments in International Sustainable Development Law on Access to Water and Human Rights, CISDL Legal Brief prepared for the U.N. Commission on Sustainable Development, 12th Sess. (Apr. 2004), available at http://cisdl.org/pdf/brief_Water_Tenure_and_Rights.pdf Movie: Thirst. Infrastructure as catalyst for local economic development: (Session 4) Sep. 27 Iskander, N. (2005) Practice and power: Emigrants and situated development in the Moroccan Souss, Chapter 4, Innovating Government: Migration, Development, and the State in Morocco and Mexico, 1963-2005. Cambridge, MA: MIT. PhD Dissertation. The infrastructure "business": Utilities and other service providers: (Session 5) Oct. 4 Student presentations on Chicago/San Franciscos water, transport and electricity service providers. Infrastructure theory: (Session 6) Oct. 11 World Bank (2004) World Development Report 2004: Making services work for poor people. Oxford University Press, New York. Overview, pp. 1-18, 23-24. Gulyani, S. (2001a) Innovating with infrastructure: The automobile industry in India. Palgrave Macmillan Press, Basingstoke and New York. Chapter 1 (Introduction). Additional/Optional Reading: Jimenez, E. (1995) Human and physical infrastructure: Public investment and pricing policies in developing countries. In Handbook of Development Economics 3, eds. J. Behrman and T.N. Srinivasan. Elseiver, Amsterdam.
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India Infrastructure Report: Policy Imperatives For Growth And Welfare (1996) Report of the Expert Group on the Commercialization of Infrastructure Projects (Rakesh Mohan, Chair) for Ministry of Finance, Government of India. Thomson Press, Delhi. Vol. 1 (Executive Summary). Water: Problem definition and goals (Session 7a) Oct. 18 Fass, S. (1988) Political economy in Haiti: The drama of survival. Transaction Publishers, New Brunswick. NJ. Chapter 4. Economist, The. July 19-25, 2003. Priceless: A survey of water, pp. 1-15. Additional/Optional Reading: World Bank (1992) World Development Report 1992. Oxford University Press, Oxford. Chapters 2 and 5. United Nations. (2003) Water for people, water for life. World Water Development Report. UNESCO and Berghahn Books, Oxford. Executive Summary, pp. 4-12, 15-16, 27-28, 30-31. Water: Buyers, sellers and other stakeholders (Session 7b) Oct. 18 Whittington, D., Lauria, D.T. & Mu, X. (1991) A study of water vending and willingness to pay for water in Onitsha, Nigeria. World Development, Vol. 19, No. 2/3, pp. 179-198. Crane, R. (1994) Water markets, market reform and the poor: urban Results from Jakarta, Indonesia. World Development, 22 (1): 71-83. Additional/Optional Reading: Collingnon, B., & Vzina, M. (2000) Independent water and sanitation providers in African cities: Full report of a ten-country study. Water and Sanitation Program, The World Bank, Washington DC. Lovei, L & Whittington, D. (1993) Rent-extracting behavior by multiple agents in the provision of municipal water supply: A study of Jakarta, Indonesia. Water Resources Research, Vol. 29, No. 7, pp. 1965-1974. Water: Household demand (Session 8) Oct. 25 White, G., Bradley D. & White, A. (1972) Drawers of water: Domestic water use in East Africa. University of Chicago Press, Chicago. Chap. 1 (pp. 1-6), Chap. 5 and Chap. 9. Thompson, J., Porras, I. T., Wood, E., Tumwine, J. K., Mujwahuzi, M. R., Katui-Katua, M. & Johnstone, N. (2000) Waiting at the tap: Changes in urban water use in East Africa over three decades. Environment & Urbanization, Vol. 12, No. 2: 37-52, October. Gulyani, S., Talukdar, D. & Kariuki, R. M. (2005) Universal (non)service?: Water markets, household demand and the poor in urban Kenya. Urban Studies, Vol. 42, No. 8: July. World Bank Water Demand Research Team (1993) The demand for water in rural areas: Determinants and policy implications. The World Bank Research Observer, Vol. 8, No. 1, pp. 47-70, January. Additional/Optional Reading: Briscoe, J., de Castro, P. F., Griffin, C., North, J. & Olsen, O. (1990). Toward equitable and sustainable rural water supplies: A contingent valuation study in Brazil. The World Bank Economic Review, Vol. 4, No. 2, pp. 115-134. Mu, X., Whittington, D. & Briscoe, J. (1990) Modeling village water demand behavior: A discrete choice approach. Water Resources Research, Vol. 26, No. 4: 521-529. Whittington, D., Mu, X. & Roche, R. (1990) Calculating the value of time spent collecting water: Some estimates for Ukunda, Kenya. World Development, Vol. 18, No. 2, pp. 269-280. Water: Integrating demand-driven approaches and supply-side reforms (Session 9) Nov. 1 Gulyani, S. (2001b) The demand side approach to planning water supply. In The Challenge of Urban Government, eds. M. Freire & R. Stren. The World Bank, Washington DC, pp. 183-192. Altaf et al (1993) Rethinking rural water supply policy in the Punjab, Pakistan. Water Resources Research 29 (7): 1943-1954.
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Griffin, C., Briscoe, J., Singh, B., Ramasubban, R. & Bhatia, R. (1995) Contingent valuation and actual behavior: Predicting connections to new water systems in the state of Kerala, India. The World Bank Economic Review, Vol. 9, No. 3, pp. 373-395. READER II Electricity: The problem and options for fixing the supply-side (Session 10a) Nov. 8 Hunt, S. and Shuttleworth G. (1996) Introduction. Competition and Choice in Electricity. Wiley: New York, Chapter 1, pp. 1-8. India Infrastructure Report: Policy Imperatives For Growth And Welfare (1996) Report of the Expert Group on the Commercialization of Infrastructure Projects (Rakesh Mohan, Chair) for Ministry of Finance, Government of India. Thomson Press, Delhi. Vol. 1 (Executive Summary), pp. 1-2, 31-34. Economist, The. (August 5-11, 2000) The electric revolution, pp. 19-20; The dawn of micropower pp. 7577. Agarwal, M., Alexander, I. and Tenebaum, B. (2003) The Delhi Electricity Discom Privatization: Some Observations and Recommendations for Future Privatizations in India and Elsewhere. Energy and Mining Sector Board Discussion Paper No. 8, The World Bank, Washington, DC. Kessides, I. (2004) Restructuring Electricity Supply. In Reforming Infrastructure: Privatization, Regulation and Competition, A World Bank Policy Research Report, Oxford University Press and World Bank, Washington DC, Chapter 3, pp. 131-182. Additional/Optional Reading: The Harvard Business School (1996) Enron Development Corporation: The Dhabol Power Project in Maharastra, India (A) and (B), Case No. 9-596-099 and 9-596-100, Harvard University, Boston. Tenebaum, B., Locke, R. and Barker, J. (1992) Electricity Privatization: Structural, Competitive and Regulatory Options, Energy Policy, December. Movie: Enron (Session 10b) Nov. 9, Thursday, 8 pm (Tentative slot but hold it in your calendar) Electricity: Firm demand and user-devised solutions (Session 11) Nov. 15 Gulyani, S. (1999) Innovating with infrastructure: How Indias Largest Carmaker Copes with Poor Electricity Supply. World Development, Vol. 27, No. 10. Lee, K. S., Anas, A. and Oh, G. (1999) Costs of In...